Honestly, it’s about time we had the talk. You’ve probably seen the headlines or noticed fewer shiny brown coins in your change lately. As of late 2025, the U.S. government basically threw in the towel. After 232 years of clinking in pockets and clogging up cupholders, the circulating Lincoln cent is officially entering its "retirement" phase. Why? Because the cost to mint a penny has become a total fiscal nightmare.
It’s expensive to be cheap.
The U.S. Mint’s 2024 Annual Report laid it all out in cold, hard numbers. Producing a single one-cent piece now costs 3.69 cents. That’s not a typo. We are spending nearly four cents to create one cent. If you ran a lemonade stand and spent four dollars to make a one-dollar profit, you’d be out of business by lunch. But for nineteen consecutive years, the Treasury just kept on pressing them.
The 3.69-Cent Problem: Breaking Down the Bill
When people ask about the cost to mint a penny, they usually think it’s just the metal. It’s not. Zinc and copper prices definitely play a role, but there’s a whole machine behind that coin.
Think about the logistics. You have to buy the "blanks" (the flat metal discs), strike them with the image of Abe Lincoln, and then pay for the "SGA"—that’s Selling, General, and Administrative costs. In 2024, the metal itself cost roughly 3 cents per coin. The rest? That’s labor, transport, and the sheer overhead of keeping the Philadelphia and Denver Mints running.
Moving 8,000 tons of pennies is heavy work.
The Mint shipped about 3.2 billion pennies in fiscal year 2024 alone. Because pennies are heavy and low-value, they are notoriously expensive to move. We’re talking armored trucks crisscrossing the country to deliver coins that most of us just throw in a jar and forget. In fact, some studies suggest that two-thirds of all pennies minted simply vanish from circulation every year. They end up in couch cushions or trash cans.
What’s actually in a penny?
If you’re a child of the 70s, you remember pennies that felt... solid. Since 1982, the composition has been 97.5% zinc with a thin copper coating. If they were still 95% copper, the cost to mint a penny would be astronomical. Even with the "cheap" zinc, the price of raw materials has spiked so much that the Treasury was losing over $85 million a year just on this one denomination.
The nickel isn't doing much better. A five-cent piece currently costs about 13.78 cents to make.
Why did it take so long to stop?
You’d think the government would have pulled the plug years ago. They didn't. Politics is a weird game. For decades, groups like "Americans for Common Cents" (yes, a real pro-penny lobby) argued that removing the coin would hurt the poor or cause "rounding inflation."
The fear was that if a gallon of milk cost $3.99 and you paid with cash, the store would round up to $4.00, essentially "taxing" people who don't use cards. But the data from countries like Canada and Australia—who killed their pennies years ago—showed that rounding actually balances out. Sometimes you lose two cents, sometimes you gain two. It’s a wash.
The 2025 Turning Point
Everything changed when President Trump issued a directive in early 2025 to stop circulating production. The Mint officially struck its final batch of circulating pennies on November 12, 2025. It wasn't just about the cost to mint a penny, although saving $56 million a year is a nice perk for the taxpayers. It was about the fact that we just don't use cash like we used to.
Only about 7% of U.S. transactions are cash-based now. Most of us are tapping phones or swiping chips. In that world, a coin that can't even buy a piece of gum is a relic.
What happens to the pennies you still have?
Don't worry. Your penny jars aren't worthless.
- Legal Tender: They are still 100% legal to spend. Shops can still take them if they want to.
- The "Rounding" Shift: Expect to see signs at registers explaining that cash totals will now be rounded to the nearest nickel.
- Collector Value: Some 2025 pennies might actually become "keys" for collectors since they represent the final year of mass production.
The Hidden "Penny Tax" on Businesses
It’s not just the government losing money. Retailers hate pennies. Think about the time a cashier spends counting out four cents for a $19.96 total. Or the time spent at the end of a shift balancing a drawer. Banks even charge businesses to process rolls of coins—sometimes as much as 10 cents per roll. When a roll is only worth 50 cents, that's a 20% "handling fee."
Basically, the penny was a drag on everyone’s time.
A Look at the Competition: Paper vs. Metal
It’s funny to compare. A $100 bill only costs about 9.4 cents to print. That's a massive profit for the government (called seigniorage). The penny was the only "product" the government made where the more they "sold," the more money they lost.
The transition is going to feel weird for a while. You’ll go to a gas station, the total will be $4.02, and you’ll just hand over $4.00. Or it’ll be $4.03 and you’ll pay $4.05. It’s slightly chaotic, but it beats the alternative of literally burning millions of dollars in zinc and transportation costs every month.
🔗 Read more: Federal Short Term Capital Gains Tax: Why Your Quick Wins Might Cost More Than You Think
What You Should Do Now
If you’ve got a mountain of copper and zinc sitting in a five-gallon water jug, now is a great time to act.
- Check for pre-1982s: These are 95% copper. Their "melt value" is actually higher than a cent, though melting them is technically illegal. Still, they are cool to keep.
- Dump them now: Coinstar machines or your local credit union are going to get busy. Get ahead of the rush before banks start getting stingy about accepting unrolled coins.
- Keep a few "First and Last": Grab a 1909 (first year of Lincoln) and a 2025 (last year of circulating production). It’s a neat piece of history for your grandkids.
The era of the one-cent coin is effectively over. We fought for it because of nostalgia and a fear of "rounding up," but the cost to mint a penny finally became too high for the math to work.
Next Steps for Your Wallet
Start transitioning your "spare change" habits. If you still carry cash, expect to see more nickels and fewer brown coins. You might want to look into "round-up" apps for your debit card—they basically do what the penny used to do, but digitally and without the heavy pockets. Check your local retailers for new rounding policy signs to see how they handle the 1, 2, 6, and 7-cent remainders.